05 Nov Annuities Explained: Retirement Income, Tax Benefits
Annuities Explained
Annuities are often a go-to option for retirees looking to create a steady income stream and protect against outliving their savings. But not all annuities are the same. In this post, we’ll explore the types of annuities, their benefits, and how they fit into a comprehensive retirement plan. (Annuities Explained: Retirement Income, Tax Benefits)
What is an Annuity?
An annuity is a financial contract between you and an insurance company that provides a steady income stream, usually for life. You invest a lump sum or make payments, and in return, the insurance company guarantees periodic payments, which can be immediate or deferred.
Types of Annuities:
- Fixed Annuities: Provide guaranteed payments and are often used for those seeking stability.
- Variable Annuities: Payments vary based on the performance of chosen investments, offering higher growth potential.
- Fixed Indexed Annuities (FIA): Combine elements of fixed and variable, with returns tied to a market index but offering downside protection.
Key Benefits:
- Guaranteed Income: Provides peace of mind with predictable income during retirement.
- Tax-Deferred Growth: Your investment grows tax-free until you start withdrawals, potentially reducing your tax burden.
- Customizable Payout Options: Choose between lifetime or term payments, depending on your financial goals.
How Annuities Support Retirement Goals
Annuities help cover essential living expenses in retirement, acting as a safety net that complements Social Security and other retirement income. They’re especially valuable for those who want peace of mind and protection against market fluctuations.
An annuity could be the key to a secure, comfortable retirement. Contact The Policy Shop to find the right annuity product that fits your needs.
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